Listen to Pottymouth, no we didn’t say Portsmouth!

Here’s a letter we have received at the Waverley Web from Jim Duffy a local architect about… yes you guessed! “The slow motion car crash” about to happen with the ‘Brightwells, Farnham -Retail Investment Risk Assessment’ Not that the one sitting in the Giant Chamber pot will take any notice!

And… listen very carefully to the interview with the BBC! 
We have!  And, Pottymouth says, quite clearly,  that they have just had a Judicial Review and were successful. ..   Let us assure everyone in the borough of Waverley.

There has not been a JR and so she lies – and lies! 

Dear Surrey County Councillors
Please see this link for an interview yesterday with me on BBC Radio Surrey, including a response by Waverley Councillor Julia Potts and a statement by SCC

http://www.bbc.co.uk/programmes/p04tllk1 BBC Surrey – Breakfast on BBC Surrey, 17/03/201

Click on the picture of the presenters and a slider appears. Move slider to 1.39:40
In the interview you can hear how narrow but important the focus of my critique is. It is all about the unit shops rather than the restaurants, cinema, food store or housing. These other uses are much less location-sensitive and should be fine. These are my two main concerns:

1.Off-Pitch location
My contention, based on considerable experience and market knowledge, is that this location is completely “off-pitch” for mainstream retail and it can’t be fixed. Ms Potts doesn’t respond at all to this point.

This isn’t true for retailers who have no re-generation agenda. They simply want the best available shop in the position of highest footfall. This isn’t East Street and never will be. Despite Ms Potts claims, a  new Cinema, restaurants and food store will not provide sufficient new daytime footfall to “anchor” the new comparison-goods unit shops. A smallish scheme, such as this, would only work as a well-connected extension to the existing “prime pitch”. The reality is that the Brightwells site suffers badly from being across a busy traffic junction and in the middle of a secondary shopping area with an existing high vacancy rate.

2. SCC’s high-risk gamble with public money
Surrey County Council has chosen to invest in a scheme that has been passed over for 15 years by all the top industry investors. Doesn’t this fact alone tell you this is unwise and carries a very high risk? Its desire to invest in Surrey towns is laudable but not by taking on an un-viable scheme that the market has so firmly rejected?

It seems that over 70% of the rent that is required to support the £30m commercial investment is dependent on letting the unit shops to leading multiples at very high rental levels, relative to the adjacent East Street pitch. When this doesn’t happen the value of the investment will plummet by at least this percentage.
The normal practice for such investments is for the developer to take the up-front risk. He does need to secure the end investor in principle. This enables the developer to obtain bank finance to build and let the scheme. However,the long-term investor gets a ready-made income on long leases – at or close to 100% let . The investor has a monitoring role during construction but doesn’t pay anything until letting is finalized.

According to press reports, only 30% of the space needs to be let before the investment goes final. Apparently this threshold has already been reached with the Cinema, Restaurants and Food Store. This strongly suggests that SCC will have to make a full commitment to the investment with not a single unit shop let. Its development partners will be relatively secure but SCC is  therefore taking a huge gamble with public money!

With a new retail development, where retailers “hunt in packs”, it is pretty well all or nothing. I think the chances of leading retailers agreeing en-mass to go here are close to zero. My prediction is that it will open with twenty-two empty units with hoardings. This is going to be a big problem.
Councillors. Please pause now until you have a full understanding of these issues. You seem to be sleep-walking into a financial disaster. Nothing can now stop you but your own good judgement.
I’ve sent a similar e-mail to Waverley Borough Councillors.

Kind regards
Jim Duffy
Director

jduffy@addarchitects.co.uk